Pass tax plan: Bush

By Sridhar Krishnaswami

WASHINGTON, MARCH 18. With his tax cuts increasingly under attack and the financial markets taking a beating in the last several days, the U.S. President, Mr. George W Bush, again took to the air waves asking Congress to give Americans ``good economic news'' by passing his $1.6 trillion plan.

``We have been hearing too much troubling economic news. It is time for the United States Congress to give Americans some good economic news; tax relief for everyone who pays income taxes,'' said Mr. Bush in his weekly radio address. He also talked about the state of the economy and what had been going on in the financial markets.

``For several months, economic indicators have pointed toward a slowdown. And now many Americans are beginning to feel the impact... The stock market is causing worries, high energy prices are straining family budgets and some American workers and small business people have been directly affected by layoffs and slowing retail sales.''

But Democrats and critics of the President say that it was Mr. Bush who had responsibility for the plunging stock prices - a sustained attempt to talk down the economy with a view to winning support for his plan. Stocks closed on a depressing note on Friday and it is said that the week's slump had destroyed some $900 billions of investor wealth.

Wall Street is anxiously waiting for some relief from the Chairman of the Federal Reserve, Mr. Alan Greenspan, this Tuesday. But the argument has been that Mr. Greenspan must go beyond a one half per cent cut in interest rates if there is to be any impact on the markets.

Mr. Bush and Conservative Republicans contend that a tax cut plan spread over 10 years that includes a lowering of rates and the repeal of estate tax is what the economy needs. ``This would be good news for families struggling to pay off debt and to save for the future,'' said Mr. Bush adding that his tax cut would be good news as well for the broader economy - economic growth, job creation and consumer confidence. But Democrats on Hill who have been dismayed at the fashion in which the Republicans managed to get the tax cut plan through the House of Representatives are calling for a smaller package spread over a five-year period. And some in the Senate - including Republicans - are talking of a trigger mechanism that would peg tax cuts to real surplus.

By and large, the Democrats have been making the point that the plan would return to an era of deficit spending and that it does not help the most needy. ``That's like playing Russian roulette with our economic future. After this past week's market performance, who can trust predictions going out 10 years,'' argued a Congressman, Mr. Robert Menendez. There are indications that Mr. Bush may no longer hang in tough with only his numbers; that ultimately a figure would be reached between his $960 millions across the board tax cuts and the Democrats' figure of about $600 millions. But the fight in the Senate promises to have all the elements of high drama. ``...tax relief is more than common sense, it is a matter of principle. My tax relief plan is also a tax reform plan. It corrects some of the worse, most unfair abuses in our current tax system,'' Mr. Bush argues.

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